Dr.

David Stadelmann
Lehrstuhl für Volkswirtschaftslehre II

Seminar on
“Economic Development and Growth”

CONTENT

Low and middle‐income countries face many challenges in their quest for economic
development. Although living standards have improved in many countries over the past
decades, a significant part of the world’s population still lives below the absolute poverty
line. What distortions and market failures hinder people’s quest to improve their economic
situation and their well‐being in the long‐run? Which influence do geography, the disease
environment, human capital, institutions and trade have on poverty? Why do the absence of
functioning market solutions and the prevalence of informal institutions lead to the
creation of important externalities hampering growth?
In this seminar we will analyze problems related to slow growth, unstable and informal
institutions, high poverty rates and high income inequality. Among others, we examine in
detail different drivers for economic development, the potential role of unfavorable
geographic conditions, incentive structures such as property rights and regulation,
economic openness as well as formal and informal lending facilities. The modern literature
provides potential strategies for accelerating growth and attaining sustainable
development which will be discussed too. Finally, we analyze, synthesize and evaluate the
literature’s recommendations for policy‐making with a particular focus on less‐developed
countries.

TARGET GROUP

This seminar requires a good understanding of how to read and interpret econometric
results as well as an understanding of general economic principles and mathematics.
Advanced bachelor and master students form the target group for this course. The seminar

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is in English. Needless to say, participants are not required be near‐perfect in English to
participate.

SEMINAR ORGANIZATION

 An introductory lecture on the topics of the seminar and the assignment of presentation
topics takes place on Thursday, October 18, 2012 from 13:15‐16:00.
 The presentations will take place on November 06, 2012 and November 07, 2012.
Thus, there will be sufficient and equal time for everybody to prepare.
 Applications including an academic transcript should be sent until October 11, 2012
(by e‐mail) to heidi.frohnhoefer@uni‐bayreuth.de; late applications can be considered
as long as there is free capacity.
 Deadline for handing in written work: November 30, 2012.

REQUIREMENTS

 Seminar participants are asked to give presentations on topics based on a selection of

recent articles which are published or forthcoming in top academic journals.
 Participants have to moderate the discussion following their presentation and respond
to questions.
 The grade will be given on basis of the seminar presentation and a written paper of
approximately 3500 words (main text) at Bachelor level and 4500 words at Master
level.
 Participation in discussions during the seminar is expected of all participants.
Attendance is compulsory.

CREDIT POINTS

 Economics and IWE/IWG students can acquire 5 CP in their Bachelor program and 6 CP
in their Master program.
 P&E students can acquire 8/10 CP (depending on their program regulations)‐

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 o For the additional points, these students have to participate in a “final
discussion” on the course.
o There is no necessity for preparing written work or participating in the “final
discussion” if P&E students just want to acquire 2 CP (“kleiner Schein”).

REFERENCES TO SEMINAR PAPERS

The following list provides an overview of topics discussed in the seminar. For each topic a
couple of references are already provided. Students are required to search additional
literature when preparing presentations on a topic.

1. Drivers for economic development and growth: An overview
o Acemoglu, D.; Johnson, S. & Robinson, J. A. (2001), 'The Colonial Origins of
Comparative Development: An Empirical Investigation', American Economic Review
91(5), 1369‐1401.
o Hall, R. E. & Jones, C. I. (1999), 'Why Do Some Countries Produce So Much More
Output Per Worker Than Others?', Quarterly Journal of Economics 114(1), 83‐116.
o Sala‐i‐Martin, X. S.; Doppelhofer, G. & Miller, R. I. (2004), 'Determinants of Long‐
Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach',
American Economic Review 94(4), 813‐835.

2. Geography vs. institutions vs. human capital
o Rodrik, D.; Subramanian, A. & Trebbi, F. (2004), 'Institutions Rule: The Primacy of
Institutions Over Geography and Integration in Economic Development', Journal of
Economic Growth 9, 131‐165.
o Glaeser, E. L.; Porta, R. L.; de Silane, F. L. & Shleifer, A. (2004), 'Do Institutions Cause
Growth?', Journal of Economic Growth 9(3), 271‐303.
o Sachs, J. D. (2003), 'Institutions Don't Rule: Direct Effects of Geography on Per Capita
Income', Working Paper 9490, National Bureau of Economic Research.

3. Innovation and technological chance: New growth theories

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 o Aghion, P.; Bloom, N.; Blundell, R.; Griffith, R. & Howitt, P. (2005), 'Competition and
Innovation: An Inverted‐U Relationship', Quarterly Journal of Economics 120(2),
701–728.
o Aghion, P.; Blundell, R.; Griffith, R.; Howitt, P. & Prantl, S. (2009), 'The Effects of Entry
on Incumbent Innovation and Productivity', The Review of Economics and Statistics
91(1), 20‐32.
o Romer, P. M. (1994), 'The Origins of Endogenous Growth', Journal of Economic
Perspectives 8(1), 3‐22.

4. Poverty and undernutrition
o Besley, T. & Burgess, R. (2003), 'Halving Global Poverty', Journal of Economic
Perspectives 17(3), 3‐22.
o Fogel, R. W. (1994), 'Economic Growth, Population Theory, and Physiology: The
Bearing of Long‐Term Processes on the Making of Economic Policy', American
Economic Review 84(3), 369‐395.
o Subramanian, S. & Deaton, A. (1996), 'The Demand for Food and Calories', Journal of
Political Economy 104(1), 133‐62.

5. Health and labor in less developed economies
o Acemoglu, D. & Johnson, S. (2007), 'Disease and Development: The Effect of Life
Expectancy on Economic Growth', Journal of Political Economy 115(6), 925‐985.
o Besley, T. & Burgess, R. (2004), 'Can Labor Regulation Hinder Economic
Performance? Evidence from India', Quarterly Journal of Economics 119(1), 91‐134.
o Foster, A. D. (1994), 'Poverty and Illness in Low‐Income Rural Areas', American
Economic Review 84(2), 216‐20.

6. Overcoming credit restrictions: Credit and microfinance
o Banerjee, A. V. & Duflo, E. (2010), 'Giving Credit Where It Is Due', Journal of Economic
Perspectives 24(3), 61‐80.
o Beck, T.; Demirgüç‐Kunt, A. & Levine, R. (2007), 'Finance, inequality and the poor',
Journal of Economic Growth 12(1), 27‐49.
o Burgess, R. & Pande, R. (2005), 'Do Rural Banks Matter? Evidence from the Indian
Social Banking Experiment', American Economic Review 95(3), 780‐795.

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 o Morduch, J. (1999), 'The Microfinance Promise', Journal of Economic Literature
37(4), 1569‐1614.

7. Inequality and economic development
o Barro, R. J. (2000), 'Inequality and Growth in a Panel of Countries', Journal of
Economic Growth 5(1), 5‐32.
o Sala‐i‐Martin, X. S. (2006), 'The World Distribution of Income: Falling Poverty and ...
Convergence, Period', Quarterly Journal of Economics 121(2), 351‐397.

8. Does trade induce growth and development?
o Frankel, J. A. & Romer, D. (1999), 'Does Trade Cause Growth?', American Economic
Review 89(3), 379‐399.
o O’rourke, K. & Williamson, J. (2005), 'From Malthus to Ohlin: Trade, Industrialisation
and Distribution Since 1500', Journal of Economic Growth 10(1), 5‐34.

9. Effects of education and human capital
o Duflo, E. (2004), 'The medium run effects of educational expansion: evidence from a
large school construction program in Indonesia', Journal of Development Economics
74(1), 163‐197.
o Plug, E. (2004), 'Estimating the Effect of Mother's Schooling on Children's Schooling
Using a Sample of Adoptees', American Economic Review 94(1), 358‐368.

10. Migration as a forgotten force?
o Beine, M.; Docquie, F. & Rapoport, H. (2001), 'Brain drain and economic growth:
theory and evidence', Journal of Development Economics 64, 275–289.
o Grossmann, V. & Stadelmann, D. (2011), 'Does international mobility of high‐skilled
workers aggravate between‐country inequality?', Journal of Development Economics
95(1), 88‐94.
o Mountford, A. (1997), 'Can a brain drain be good for growth in the source economy?',
Journal of Development Economics 53(2), 287‐303.

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